By Shereen Siewert
Wausau officials on Tuesday advanced a proposal by a newly-formed nonprofit organization to purchase and revitalize the troubled Wausau Center mall, with at least $1.65 million in incentives.
Wausau Opportunity Zone Fund, Inc., or WOZ, is a nonprofit corporation organized and funded by local philanthropic foundations for the sole purpose of acquiring Wausau Center and partnering with city officials to ensure the mall is used “in a manner that supports the quality of life, and long-term economic benefit of taxpayers of Wausau by maintaining an attractive, and vibrant downtown.”
Attorney Joe Mella, speaking on behalf of WOZ, took to the podium Tuesday and said the corporation already bid on the property but the offer is contingent on the city’s involvement. The proposal includes a $1 million forgivable loan and transfer of city-owned mall property, including the Sears building, to the corporation for $1. Without city assistance, Mella said, the WOZ will lose the bid.
The city would be co-owner and involved as a partner in management of the property for an indefinite amount of time.
The Mall is located within a so-called “opportunity zone” which will provide a new owner with “attractive” long-term capital gains benefits, according to the property listing. The mall is part of a federal “opportunity zone,” part of the federal tax cuts and job acts of 2017. The program aims to drive long-term investment into designated, economically distressed areas across the country, while offering potentially lucrative tax incentives to real estate investors. Under the terms of the program, investors can defer capital gains on a previous investment if the money is reinvested into an “opportunity zone” asset. Investors can also take advantage of additional assistance such as tax increment district (TIF) funding.
See a description of the opportunity zone program here.
Despite working for more than a week with city officials on the plan, preliminary proposal details were uploaded to the city’s website and faxed to the Wausau Daily Herald newsroom at 4:30 p.m. Monday, narrowly meeting the state’s 24-hour open meetings requirements. The city’s municipal code calls for council and committee packets to be prepared and available no less than six days prior to the scheduled meeting, but the city council president or committee chair may waive the requirement for good cause.
Wausau bought the Sears building in 2017 for $650,000 but has since struggled to fill the space. Micon, a family-owned theater company with three theaters in Eau Claire and Chippewa Falls, had originally planned a 10-screen complex for the building that would have required a roughly $10 million investment into the project. But those plans fell apart in 2017. The space has been used for storage in recent months. Since the city’s 2017 purchase of the Sears space, the property has essentially been off the city’s — and county’s — tax rolls. In 2016, the property was assessed at $4 million and generated $101,023.81 in property taxes. Of that, $38,698.07 went to the city of Wausau, according to the Marathon County Land Records system.
After meeting in closed session, members of the economic development and finance committees voted to forward the plan to the full council. The proposal is expected to come up for a vote in October.
See the full packet and proposal here.